Tax Cuts and Idiots

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Watcher
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Tax Cuts and Idiots

The almost zombie like utterances by the idiot crowd...Democrats (but I repeat myself) that the proposed tax cuts benefit the rich and not the poor. They never seem to understand that you simply cannot cut taxes on people who pay no taxes.. Well, yes, I guess you can. It is something called the Earned Income Tax Credit whereby some people get income tax refunds of taxes they never paid. That is for another discussion of idiocy in action.

Anyway, this little story has been around (I think it has been posted on AMG) for many years but bears repeating in this climate of Liberal/Swine dishonesty and downright stupidity.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
'Since you are all such good customers, he said, 'I'm going to reduce the cost of your daily beer by $20.
Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.
But what about the other six men - the paying customers?
How could they divide the $20 windfall so that everyone would get his 'fair share?'
They realized that $20 divided by six is $3.33.
But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. 'I only got a dollar out of the $20,'declared the sixth man. He pointed to the tenth man,' but he got $10!' 'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!' 'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!' 'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!' The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, journalists and college professors, is how our tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

anonymous_coward
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Your analogy, while cute, is

Your analogy, while cute, is incorrect, because it equates the services people receive from the government as drinking beer.

Drinking beer, while extremely important to me and many other people who love beer, is not:
1) necessary to live (standard liberal argument, less government assistance and people die, but no one here cares about that)
2) crucially important to allowing the 9th and 10th payers to maintaining their vast ownership of wealth.

While it's obvious to note that the government providing health care for old and poor people is a service they provide, the government also provides the infrastructure necessary for billionaires to thrive. For example:
1) a military to prevent war (yes, I am a Democrat and I believe a strong national defense is crucial for peace)
2) military to reduce global piracy of international commerce
3) roads and other shared infrastructure
4) research and development funding that the private sector is too short term or risk averse to provide - e.g. anything that the military has produced, like the internet
5) a central bank that practically gives money away to wealthy corporations
6) boring but essential stuff like a court system to resolve disputes, rule of law, enforcement of contracts, etc.

In short, the 10th guy wouldn't have hundreds of millions of dollars without the government providing these services that we take for granted. So the 10th guy has a lot to lose if the government were to cease to exist (he/she would still be wealthy, but significantly less so, and would have to hire a private army to defend from roving bands of barbarians.)

Also for what it's worth, I've had drinks with people worth $10's of millions of dollars (sheer accident or friends of friends), and they pretty much always buy everyone's drinks...

Watcher
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Spoken like a true Liberal.

Spoken like a true Liberal. Lets change the story from beer to food...a necessary item you will agree. The analogy still holds. BTW, the government provides nothing. Everything in America is provided by the taxpayer. The government is supposed to be merely the hired hand to do our bidding, not the master of our existence as you seem to believe.

Anyway, the author of that little piece said.."For those who understand the analogy, no explanation is necessary. For those who do not, no explanation is possible." You fit the latter group.

anonymous_coward
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You've completely glossed

You've completely glossed over my second point, which was that the 9th and 10th person's wealth is largely dependent on government operation, so, since they have the most at stake, it's only fitting that they pay the most.

FLNext
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"You didn't build that!"

"You didn't build that!"

Mainelion
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The DO pay the most, and if

The DO pay the most, and if they've been in business a long time then they most likely paid the most when the roads they are using were built. The point you're avoiding is that they should also get the most benefit from tax relief.

anonymous_coward
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If you apply tax relief, you

If you apply tax relief, you are doing it by cutting poor people's support, or by going into debt (which I assume we all agree is bad).

So you are essentially taking stuff from poor people and giving it to rich people. It's really just that simple.

I'm all for reducing unnecessary regulation and making government a slimmer operation (i.e. using nudges to get the private sector to do the right thing rather than hire a bureaucracy to monitor everything), but flat out taking shit from poor people and giving it to wealthy people is against the tenets of Christianity, which rules our fine nation.

Watcher
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Again, spoken like a true

Again, spoken like a true Liberal . When tax cuts are made we give nothing to those who are paying the taxes. We are simply taking less from them und they get to keep a little more of their own money. The tax reductions do not stop the welfare programs at all. The. Cuts merely reduce the rate of the aawf ruinous growth of the government state give away

Al Amoling
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Please please Watch don't

Please please Watch don't throw facts out there to confuse.

anonymous_coward
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"When tax cuts are made we

"When tax cuts are made we give nothing to those who are paying the taxes. "

Umm yes, when you cut someone's taxes you are literally giving them money.

If I make a million dollars and have a 20% rate, I pay 200,000 and pocket $800,000.
If my rate gets cut to 15%, I pocket $850,000.

Before: $800,000
After: $850,000

The tax cut *literally* gave me $50,000.

Northarrow
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If you made a million dollars

If you made a million dollars, well then you made a million dollars.

Before: $1,000,000

After 20% tax I forfeit $200,000 – I'm down to $800,000.
If 15% Tax, I only forfeit $150,000 – so I'm down to $850,000.

I forfeit $50,000 less, but that $$$ was mine to begin with. The government magnanimously is allowing me to keep more of what I earned.

Mainelion
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The tax cut did not

The tax cut did not *literally* give them anything. You act like it ALL belongs to the drones infesting government, who produce nothing, and everything is a gift from them.

You should be living under a dictator. Then your words would ring true.

Man...You Just Can Not Make This Stuff UP!!!

anonymous_coward
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If you didn't have government

If you didn't have government services, you would have made $200,000 instead of $1,000,000, and you would have had to pay $100,000 to hire a security force to protect your family from extortion.

So, in exchange for the $900,000, you pay $200,000 to the government to make it function properly.

Watcher
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Hey A-C under your logic, if

Hey A-C under your logic, if I do not rob you of the $100 in your wallet, am I giving you $100 which was taken away from the robber? You cannot be that dumb.

mainemom
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Why indulge A-C in the

Why indulge A-C in the beating up of the straw man, ie, anarchy?
Are there only two choices - what we have now, or tax cuts = anarchy?
To use the cool kids' jargon, is it a binary choice?
Or can we acknowledge that ordered liberty includes a certain delegation to government of powers to adjudicate contracts, preserve property rights, facilitate efficient commerce, punish the use of force or fraud, implement the will of the people on regulating externalities of air and water pollution, etc., keep the oceans free for the movement of people and goods, and defend the honest interests of our people wherever they may be in the world?
These powers reside with us, the people, but we delegate them to our government, so we can go about our lives and prosper according to our ambition, motivation, ability, resilience, persistence, virtue, self-discipline, and yes, luck.

One can simultaneously embrace the concept of ordered liberty and acknowledge the truth of the above analogy without internal contradiction.

Watcher
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Mainemom, you are 100%

Mainemom, you are 100% correct in theory but when 66 million Americans and some illegal aliens and a few dead people voted for Clinton, one must come to the conclusion that the voters are really too stupid to be put in charge of their voting. I know it sounds very tyrannical/Liberal slime-like but it is truer than ever. When you have ignorant, stupid people voting you do not have a popular democracy. You have government of the dumb, by the dumb and for the dumb lead by the evil Socialist Liberal/Slime.

Don't forget, these people elected Nasty Pelosi, the goofy, Maxine Waters, the ugly women with a single digit IQ, Adam Shiff, the pencil-necked twit and on and on.

anonymous_coward
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"Hey A-C under your logic, if

"Hey A-C under your logic, if I do not rob you of the $100 in your wallet, am I giving you $100 which was taken away from the robber? You cannot be that dumb."

The $100 is the price you pay for a functioning society, since we obviously can't handle that on our own.

Again, the functionality of the government is what allows wealthy people to make shitloads of money.

That, and supporting the campaign of someone that will give your industry a bunch of earmark handouts.

anonymous_coward
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@mainemon:"Or can we

@mainemon:
"Or can we acknowledge that ordered liberty includes a certain delegation to government of powers to adjudicate contracts, preserve property rights, facilitate efficient commerce, punish the use of force or fraud, implement the will of the people on regulating externalities of air and water pollution, etc., keep the oceans free for the movement of people and goods, and defend the honest interests of our people wherever they may be in the world?"

So if we cut taxes for the rich and pay for it by going into debt, is that ok?

Watcher
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A-C said "Again, the

A-C said "Again, the functionality of the government is what allows wealthy people to make shitloads of money."

The foregoing is soooooo lefty. "...functionality of government..."??? It is a meaningless statement. Nobody in America allows anybody to make money. People make it on their own. The government can only screw things up so bad that nobody makes a living. As Ron the King said..."Government is not the solution, it is the problem" and he was 100% correct...unless, of course, you are a big government Socialist Dumbocrat.

Mainelion
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Have to tax those rich people

Have to tax those rich people so we can pay $5 million for dog vomit like this...

Fraternities and sororities like to party, especially on the day of a big sporting event.

This is among the findings of numerous studies funded as part of a $5 million grant
provided by the National Institute on Alcohol Abuse and Alcoholism at the National Institutes of
Health (NIH) to a Brown University researcher.

Nearly all of the studies’ conclusions are fairly obvious, even to those with whom frat
life is totally Greek.

Perhaps the only surprise finding is that fraternity brothers and sorority sisters are even
“more likely to report consuming alcohol” after participating in an alcohol abuse
intervention.

CAUTION: PDF link SOURCE

mainemom
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A_C You set up a strawman of

A_C You set up a strawman of tax cuts = anarchy in an attempt to rebut the analogy at the top of the thread.
Now you're shifting to tax cuts = deficits even though the analogy had nothing to do with deficit spending.
Just acknowledge that under a progressive income tax, any reduction in rates is going to yield a larger dollar tax savings to the top payer than to the bottom payer. Simple math that gets spun into a narrative of give-aways to the rich. A narrative designed to make it politically untenable to cut tax rates for any reason, even to do much-needed tax reform, revenue neutral. Disgusting.

anonymous_coward
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Uggh, you're missing the

Uggh, you're missing the point.

I totally agree, if there is a useless government program, and you cut it and the corresponding taxes that pay for it, yes, the majority of the tax cut money goes to the wealthy just because of the progressive tax structure.

I'm fine with that.

What I'm not fine with, is if either:
1) the tax cut is paid for by going into debt (unless we are in the middle of a recession and are trying to apply fiscal stimulus to get the economy going)
2) the tax cut is paid for by stripping away services that poor people need, like Medicaid, or that the country needs, like infrastructure or R&D.

Watcher
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I know it will cause an

I know it will cause an argument but, tax cuts do, in fact, spur businesses to expand, provide more jobs and raise the standard of living thus....bringing in more taxes than before the cuts. The old saying is true, in my opinion...If you want less of something, tax it more. If you want more of something, tax it less.

anonymous_coward
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@Watcher: "I know it will

@Watcher: "I know it will cause an argument but, tax cuts do, in fact, spur businesses to expand, provide more jobs and raise the standard of living thus....bringing in more taxes than before the cuts. The old saying is true, in my opinion...If you want less of something, tax it more. If you want more of something, tax it less."

This is good old fashioned Keynesian fiscal stimulus, and it absolutely works, but the details are more nuanced than Grover Norquist might have you believe:
1) it only creates jobs if there is slack in the labor market (this is also true of an increase in government spending, too)
2) it only increases tax revenue if you are to the right of the maximum in the Laffer curve. Which, if the Kansas experiment is any indication, we are not.

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